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1) Meryl participated in a qualified tuition program for the benefit of her son. Meryl invested $6,000 in the fund. Four years later her son withdrew $8,000, the entire balance in the program, to pay his college tuition.

a. Meryl is not required to include the $2,000 ($8,000 $6,000) in her gross income when the funds are used to pay the tuition.

b. Meryls son must include the $2,000 ($8,000 $6,000) in his gross income when the funds are used to pay the tuition.

c. Meryl must include $8,000 in her gross income.

d. Meryls son must include $8,000 in his gross income. e. None of these statements is correct.

2) Mia sold her personal use automobile for $12,000. She purchased the car three years ago for $25,000. What is Mias recognized gain or loss?

a. $0

b. $12,000

c. ($13,000)

d. ($25,000)

e. None of the above is correct.

3) Jessica sold her personal use automobile for $20,000. She purchased the car two years ago for $17,000. The car increased in value due to its excellent mileage and safe design.

What is Jessicas recognized gain or loss?

a. $0

b. $3,000

c. $17,000

d. $20,000

e. None of the above is correct.

4) Charlie owns a tract of undeveloped land (adjusted basis of $145,000) which he sold to his son, Otis, for its fair market value of $105,000. What was Charlies recognized gain or loss and what is Otis basis in the land, respectively?

a. $0 and $105,000, respectively

b. $0 and $145,000, respectively

c. ($40,000) and $105,000, respectively

d. ($40,000) and $145,000, respectively

e. None of the above

5) Which of the following legal expenses are deductible in arriving at AGI (above the line) in 2018? A legal expense

a. incurred in connection with a trade or business

b. incurred in connection with rental or royalty property held for the production of income.

c. incurred for tax advice relative to the preparation of an individuals income tax return.

d. Only a. and b. qualify.

e. A, b., and c. qualify.

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